After remaining stagnant for nearly two years, the real estate market in Pune and the rest of India finally witnessed a much-awaited boom and revival in 20232. With life back on track post-COVID, the demand for residential and commercial spaces is rising.
The impact of the pandemic is now ebbing, and corporates and IT firms are inviting their employees back to the office or promoting a hybrid model of working. This has brought back the floating population to the cities, which directly impacts the rental rates in the city. This shift back has led to a rise in the demand for rental properties.
According to the latest market studies, the average monthly residential rentals in the top 7 cities across the luxury and mid-segment categories grew substantially in 2022. The key residential rental hotspots of metropolitans saw up to 23% growth in average monthly rentals recorded between 2019 and 2022. These prominent locations, like Mulund in Mumbai, Gachibowli in Hyderabad and Dwarka in NCR, among others, all witnessed a double-digit rental growth between 2019 and 2022. In Pune, the micro-markets Hinjewadi and Wagholi saw average monthly rentals for a typical 1,000 sq. ft. home rise up to 20% and 21%, respectively, in the given period.
Market experts highlight that the return of the Work-from-Office model is the reason for the significant increase in rental demand increased in 2022. With more companies calling their employees back to the office, including in the hybrid mode, rental demand is rising. Employees who are returning from their hometowns or other parts of the city often tend to rent homes, at least in the initial stage. Also, as both property prices and interest rates continue to rise, the overall cost of property acquisition is increasing. This has led to an increase in deferred property purchase decisions, where more and more population will seek rental homes.
Apart from IT and other professionals, Pune is also home to a number of schools and educational institutions. Students and parents both usually prefer to look for flats and accommodation in the vicinity of their homes. But the rise in rental prices has pushed students away from Peth and Kothrud to areas away from the city centre.
With the new academic session fast approaching, this population demographic will look to locate close to schools and institutions. Analysing the current situation, experts predict that rental demand will continue to head upward in 2023.
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